Specializing in industrial cleaning and water hauling for the Oil & Gas industry, this young husband and wife-owned company was experiencing rapid growth and needed additional capital to fund that growth.
Financing Solution: Factoring
Initial Amount: $500K
Location: Midwest
Industry: Hauler/ Cleaner Serving Oil & Gas Industry
The hauler had an existing factoring line but was limited by their factoring provider on debtor credit and overall line availability. The existing factoring company wouldn’t factor in additional invoices issued to one of the hauler’s largest customers due to the overall exposure with that customer and the fact that the customer paid in Net 90-day terms. This limitation significantly hampered the hauling company’s growth and ability to meet their expanding payroll.
The company had purchased numerous trucks in its brief corporate history, financing many of them through Commercial Credit Group (CCG). Their CCG representative suggested they consider switching invoice factoring companies to CCG’s affiliate, Commercial Funding (CFI).
Upon speaking with the company owners, CFI advised that it had a significant history with the company’s main customer and had worked with that customer/debtor enough to have an understanding of how they operated and their typical payment patterns. In short, the issue that kept the existing factoring company from extending the factoring line was a non-issue for CFI.
CFI’s invoice factoring line provided a much larger working capital line than their previous factoring partner, which has allowed for continued growth. In the first year with Commercial Funding, they have doubled their factoring line, from $500k to $1 million. They continue to grow, adding equipment and employees as they take on new customers and projects.